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Panetta's top priority: Credibility

For two years Defense Secretary Robert Gates has been President Barack Obama’s national security blanket, providing him credibility with Afghanistan war skeptics and cover with hawks who question his toughness.

Obama’s hand-picked replacement for Gates, CIA director and Pentagon neophyte Leon Panetta, earns high marks for bureaucratic savvy, but he offers the president less political protection at a time of budget cutting, troop draw-downs and new international threats that seem to pop up by the hour.

Two huge questions confront the 72-year-old Panetta, if he’s confirmed to the nation’s top defense post:

Can he provide Obama with the same credibility on defense that Gates did — especially if Gates turns into a critic when he leaves office?

And can Panetta sell big military budget cuts and a long overdue force restructuring to a Pentagon bureaucracy bound to view him as an outsider?

Obama is betting he can — and in fact there may have been no better alternative than a former congressman, budget chief and White House chief of staff wise in the ways of Washington.

“When it comes to defense, the Democratic bench is incredibly thin, so I think they really had no choice but to pick Leon,” said Steve Clemons, a defense and foreign policy analyst with the New America Foundation, a Washington-based think tank.

Panetta’s credibility with Republicans is high, meaning that he could provide Obama with the same sense of “adult supervision” — as Clemons calls it — as Gates.

“He’s an excellent choice for this job,” said House Homeland Security Chairman Peter King (R-N.Y.) “I can’t really think of anybody that I know that has anything bad to say about him.”

But in recent months, Clemons said, there has begun to be daylight between the Pentagon chief, first appointed by President George W. Bush, and Obama, who announced three weeks after the 2008 election that he was making Gates the first defense secretary in history to serve under two presidents from different parties.

“It’s very clear that the differences that Gates has begun to articulate with the administration, over the budget and Libya, are profound and they won’t become less. He’s going to speak his mind externally,” Clemons said. “There’s very little Obama can do about that, so they’ve selected Leon, their best bureaucratic and budget player to replace him.”

Panetta’s appointment – to be announced by Obama at the White House Thursday afternoon — has been widely expected, and is part of a series of changes that include the appointment of Gen. David Petraeus to head the CIA and Ryan Crocker to replace Karl Eikenberry as U.S. ambassador to Afghanistan.

Gates is due to leave on June 30th, a senior administration official said, with Panetta succeeding him immediately if he’s quickly confirmed by the Senate. Petraeus would start on Sept. 1, in part, to ease the transition for his successor, Lt. Gen. John Allen.

Panetta reportedly took some convincing to take the job – “tens of hours,” as the official described it - and was Gates’ own first choice for the job. Obama first broached the CIA offer with Petraeus during Oval Office meetings in mid-March.

The changes come at a particularly sensitive time — both for U.S. forces involved in conflicts in Iraq, Afghanistan and now Libya — and for policymakers in Washington.

The Pentagon, which has been managing combat operations since 2003, has been virtually immune from budget-cutting pressure — until now.

Under pressure from Republicans to make major budget cuts, the Obama budget team added something new in the final 48 hours before the release earlier this month of the president's deficit-reduction plan: $400 billion in defense and security related cuts.

That sparked a heated internal debate, people close to the situation told POLITICO, with Gates and Joint Chiefs of Staff Chairman Adm. Mike Mullen arguing that it is imperative to shield ther department at a time of two wars, an uncertain commitment in Libya and asymmetrical threats just about everywhere else.

But Obama approved the unspecified cuts to Pentagon spending, telling his staff they were necessary to “share the pain.” And that has provoked anxiety among some Obama political advisers who have long valued the cover they feel Gates has given them.

Those who know the soft-spoken Gates said it’s simply not his nature to turn into a hawkish gadfly.

But Gates has never been shy about defending his principles. He’s publicly expressed skepticism, muted though it may be, about the U.S. combat role in Libya and he’s spoken out against indiscriminate cutting of defense programs.

“The worst of all possible worlds, in my view, is to give the entire Department of Defense a haircut, basically says everybody is going to cut X percent,” he warned last week. “That’s the way we got the hollow military in the 1970s and in the 1990s. And so I want to frame this so that options and consequences and risks are taken into account ... as budget decisions are made, first by the president and then by the Congress.”

Under Gates, the key challenges the Pentagon faced were devising and executing strategies for the wars in Iraq and Afghanistan. Budget issues arose, and Gates made tough decisions to kill some programs, but those decisions may seem minor or easy compared to what confronts Panetta.

With Washington now on the verge of what is expected to be an aggressive round of budget-cutting, Iraq winding down, and limited enthusiasm for involvement in Afghanistan, supporting combat operations are expected to become less central to the defense debate.

What seems certain is that the Pentagon’s annual spending of nearly $700 billion will come under intense pressure.

Gates has warned that such cuts can’t be achieved simply through efficiencies or picking one weapons system over another.

“It is about risk management with respect to future national security threats and challenges, as well as missions that our elected officials decide we should not have to perform or ... can’t perform any more because we don’t have the resources,” he told reporters last week at the Pentagon.

As director of the Office of Management and Budget during the Clinton administration, Panetta knows something about reducing spending. He could help craft the cuts and figure out which ones will be palatable to Congress.

But there are no easy alternative: Some analysts warn that closures of major U.S. bases at home and in Europe will have to be part of any cuts of the magnitude Obama is seeking.

Gates has already made some cuts and helped kill several major acquisitions, including the F-22 fighter, the Expeditionary Fighting Vehicle and the alternative engine for the next-generation F-35 fighter. He recently initiated a new process to try to figure out what will be next on the hit list.

But Gates did not take on the fundamental strategic questions about the U.S. military’s role in the world that many Democrats had hoped for when Obama took office.

“Gates served Obama’s purposes. He should have been out of there two years ago,” said Lawrence Korb, a former Pentagon official who is now a senior defense analyst with the Center for American Progress, a think tank with close ties to the White House.

But Korb thinks that Obama — as his recent decisions on the budget and Libya show — seems to be outgrowing his initial reluctance to buck the brass at a time when popular support for continued deployments in Iraq and Afghanistan are near historic lows.

“Like every other president, he was overawed by all the medals, but he’s feeling more confident now. He doesn’t need cover. He needs someone to get the Pentagon budget under control.”

Whether Panetta is more willing to challenge the Pentagon remains to be seen.

Panetta came into his job at the CIA two years ago with a thin record on intelligence. But he quickly mastered a demoralized and fractured bureaucracy, siding with the Langley rank and file when they clashed with congressional Democrats over secrecy — a group led by Panetta’s old friend from the Bay Area, House Minority Leader Nancy Pelosi.

Panetta’s successes at the CIA were concrete, said Anthony Cordesman, a former Pentagon official and national security analyst for the Washington-based Center for Strategic and International Studies, but limited to improving intelligence flow between agencies and restoring vitality to a demoralized bureaucracy.

In taking over the Pentagon, Cordesman said, Panetta faces a similar reorganization challenge, only larger by several orders of magnitude.

“He is now inheriting the largest single business operation in the world. If he could not accomplish everything he wanted in the intelligence community, how can he do it here?” Cordesman asked.

“He faces a legacy post-Gates that’s a lot more difficult than politics,” he added. “Gates basically did not successfully restructure any aspect of our strategy in terms of force plan or deployments. Panetta walks into a structure where he has to deal with the fact that there is a massive debate over defense spending and he has to deal with about 28 unstable countries, from Morocco to Iran.”